Texas Should Consider Using the Rainy Day Fund Sooner Rather than Later | Citizens Against Government Waste

Texas Should Consider Using the Rainy Day Fund Sooner Rather than Later

The WasteWatcher

What will likely turn out to be the largest natural disaster in Texas’ history swept ashore on August 25, 2017.  Hurricane Harvey was the rainiest tropical storm in history to hit the U.S. mainland, dumping more than 60 inches of rain in Groves and Nederland; and more than 50 inches in Friendswood; near Santa Fe, near Bunker Hill Village (Houston); and on Clear Creek near League City.  Accuweather predicted that Harvey would be the most expensive natural disaster in history, costing $190 billion, or more than Hurricane Katrina and Superstorm Sandy combined.

Texas has the nation’s largest Economic Stabilization Fund (ESF), better known as the rainy day fund.  It can be used for a budget deficit, a projected revenue shortfall, or any other purpose the legislature may choose.  Use of the fund requires approval by a supermajority of the legislature.

The ESF had $9.7 billion at the end of fiscal year 2016 and should have $10.3 billion by the end of fiscal year 2017, according to the Texas Comptroller’s office.  The ESF was used twice for disaster relief; in 2003 to reimburse the Texas Department of Health and Human Services, ostensibly related to Tropical Storm Allison; and in 2013, in relation to the Bastrop wildfire.  A total of $11.6 billion has been used over the past 30 years, including $3.2 billion in 2011 to address a budget shortfall following the Great Recession.

Given the waste and abuse associated with past efforts to quickly spend disaster relief funds, it is understandable that Governor Abbott is concerned about fiscal responsibility.  In a September 26 briefing on Harvey recovery efforts, he said that the “lieutenant governor and the speaker both agree with me that Texas will need to tap into the rainy day fund.  They both agree with me that the appropriate time to do that is in the next session.”  He rejected calls for a special session of the legislature in 2018, even though he called them back in July 2017 to first address the potential shutdown of several state agencies, and then to consider 19 additional items including local property taxes, local tree ordinances, construction permits, union dues, texting while driving, and who may use school bathrooms.

Other than keeping open some state agencies, the matters reviewed during the special session are trite compared to the need of the tens of thousands of Texans who have no bathroom at all after their homes were flooded by Harvey.  Not only are they asking for help now rather than later, they are also being supported by fiscally conservative legislators and organizations across Texas. 

Empower Texans President and CEO Michael Quinn Sullivan wrote on September 1, 2017, that Hurricane Harvey is “why the fund exists.”  He noted that Governor Abbott has resisted using the ESF for a variety of wish-list projects supported by Democratic and some Republican legislators, and that conservative lawmakers had been “prescient” in protecting the fund from these “legislative looters.”  He called for “fiscal prudence” in spending money from the ESF in “the months and years ahead,” meaning sooner rather than later.

Governor Abbott may wish to reconsider his decision to wait until the regular legislative session in 2019 and call for a special session in 2018 for the single purpose of providing funds from the ESF for Hurricane Harvey relief.  That would certainly be more understandable than many of the items on the agenda for the special session in 2017.               

Sign Up For Email Updates

Optional Member Code